Slamon v Planchon

The resident landlord exception to collective enfranchisement requires a continuous qualifying interest from before conversion of the premises into flats until the relevant date, namely the date of the tenants’ notice.

Where the freehold is held on trust, Leasehold Reform (Housing and Urban Development) Act 1993, section 10(4) substitutes a trust-interest test. It does not provide an additional route permitting periods of legal ownership and trust interests to be combined. Clear statutory language cannot be rewritten to avoid surprising consequences or because the legislation is expropriatory. Interrupted ownership and interrupted trust interests therefore prevent reliance on the exception.

Long leaseholders of two flats in a three-flat house served notice under section 13 of the Leasehold Reform (Housing and Urban Development) Act 1993 seeking collective enfranchisement. The freeholder resisted, relying on the resident landlord exception. Her mother had occupied another flat for the required period, but the continuity of the freeholder’s interest since conversion was disputed.

HH Judge Wakefield decided the issue for the freeholder. He treated section 10(4) as supplementary to section 10(1)(b), allowing continuity to be established through successive legal and beneficial interests. The appeal concerned whether the statutory tests could be combined in that way, and whether interests held under separate trusts could satisfy the requirement.

1. Disposition. Rix LJ delivered the leading judgment. Longmore LJ and Peter Gibson LJ agreed. The appeal was allowed and the judge’s order was set aside.
2. Statutory construction. The continuity requirement in section 10(1)(b) of the Leasehold Reform (Housing and Urban Development) Act 1993 is assessed by looking backwards from the relevant date, being the date of the section 13 notice. The same person must have owned the freehold continuously since before conversion. Where, at the relevant time, the freehold is held on trust, section 10(4) substitutes the requirement that the same person has had an interest under the trust since before conversion.
3. Section 10(4) therefore supplants, rather than supplements, section 10(1)(b). The statutory scheme does not permit periods of freehold ownership and periods of trust interest to be mixed to create a continuous whole. The clear language could not be rewritten to avoid anomalies. The expropriatory character of the legislation did not justify a construction favouring the landlord save in a case of genuine ambiguity.
4. Application. The defendant had been a legal and beneficial co-owner before conversion, but ceased to be a freeholder when the property was transferred to her mother in 1998. Her later re-acquisition of the freehold did not restore continuity. Her trust interest was also interrupted and, in any event, arose under a later declaration of trust. The resident landlord exception was therefore unavailable.
5. The claimants were declared entitled to the right of collective enfranchisement. The counter-notice was of no effect, but the respondent was permitted to serve a further counter-notice by 4.00pm on 23 July. The respondent was ordered to pay the appellants’ costs, with £20,000 payable on account within 21 days.

• Court of Appeal (Civil Division): allowed the appeal, set aside the first-instance order and made consequential orders: [2004] EWCA Civ 799.
• Central London Civil Justice Centre: HH Judge Wakefield decided the statutory issue in favour of the defendant and accepted reliance on the resident landlord exception.